TEG  Integrys Energy Group

Exchange

NYSE

Sector

Public Utilities

Industry

Power Generation

Market Cap.

5.54B

Vuru Grade

2.95/100

Current Price

$69.66
+0.00 (+0.00%)

Stability Price

$0.00
Overvalued by 100.00%

Company Metrics

  • P/E 22.18
  • P/S 1.51
  • P/B 1.65
  • EPS 3.14
  • Cash ROIC -41.49%
  • Cash Ratio 1.00
  • Dividend 2.72 / N/A %
  • Avg. Vol. 346,938.00
  • Shares 5.89T
  • Market Cap. 5.54B

Company Description

Integrys Energy Group, Inc., through its subsidiaries, operates as a regulated electric and natural gas utility company in the United States and Canada. It provides natural gas utility services in Chicago, Wisconsin, Michigan, and Minnesota. As of December 31, 2009, the company served approximately 1,669,000 residential, commercial and industrial, transportation, and other customers. It had approx... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Wisconsin Energy completes acquisition of Integrys to form WEC Energy Group
PR Newswire (press release) - Jun 29, 2015
MILWAUKEE, June 29, 2015 /PRNewswire/ -- Wisconsin Energy Corporation announced today it has completed the acquisition of Integrys Energy - forming the WEC Energy Group (NYSE: WEC). The new company will provide electricity and natural gas to ...
Wisconsin Energy Completes $9.1B Integrys Acquisition - Natural Gas Intelligence
We Energies completes acquisition of WPS, Integrys - Green Bay Press Gazette
WEC invests $230 million in natural gas storage site
Milwaukee Journal Sentinel - Feb 1, 2017
The acquisition of Bluewater Gas Storage near Detroit was announced Wednesday by Allen Leverett, president and chief executive of Milwaukee-based WEC Energy Group Inc. Every winter, WEC subsidiaries We Energies and Wisconsin Public Service have ...
WEC Energy Group posts 2016 fourth-quarter and full-year results - Yahoo Finance
WEC Energy Group: A High Quality, High Dividend Growth Utility - Seeking Alpha
Wisconsin Energy Corp to Acquire Integrys Energy for $9.1B (WEC, TEG)
Dividend.com - Jun 23, 2014
Wisconsin Energy Corp (WEC ) announced on Monday that it has entered into an agreement to acquire Integrys Energy Group, Inc. (TEG) for $9.1 billion.
Wisconsin Energy (WEC) to Acquire Integrys (TEG) in $9.1B Deal - StreetInsider.com (subscription)
Wisconsin Energy Agrees to Buy Integrys for $5.7 Billion - Bloomberg
Corporation of the Year: WEC Energy Group
BizTimes.com (Milwaukee) - Dec 14, 2015
“This acquisition was far more about growth than about cost savings,” said Gale Klappa, chairman and chief executive officer of WEC. “The investment needs and the investment opportunities of the combined companies in terms of modernizing the energy ...
Moody's changes WEC's rating outlook to negative following acquisition ...
Moodys.com (press release) (subscription) - Jun 23, 2014
New York, June 23, 2014 -- Moody's Investors Service, ("Moody's") changed the rating outlook to negative from stable of Wisconsin Energy Corporation (WEC; A2 Issuer and senior unsecured rating, A3 junior subordinated and Prime-1 Commercial paper ...
Leverett to succeed Klappa at helm of WEC Energy Group
Milwaukee Journal Sentinel - Jan 28, 2016
Gale Klappa recalls that when he recruited Allen Leverett - an executive he had worked with at Georgia Power Co. in Atlanta - to Wisconsin Energy Corp. shortly after Klappa himself arrived in Milwaukee in 2003, he had a feeling he was hiring the ...
Klappa to retire from WEC Energy - BizTimes.com (Milwaukee)
Gale Klappa sets May 1 retirement from WEC Energy; Leverett promoted to CEO - Milwaukee Business Journal
Wisconsin Energy, Integrys deal powered by natural gas
Milwaukee Journal Sentinel - Jun 28, 2015
Milwaukee-based Wisconsin Energy Corp. will become the eighth-largest natural gas utility in the country when it completes its acquisition of Integrys Energy Group Inc. on Monday. By Tuesday, the Wisconsin Energy name will disappear and the ...
WEC Earnings Call Highlights Natural Gas Efforts
RTO Insider - Feb 7, 2017
While year-over-year net income climbed about $300 million thanks to its Integrys acquisition, WEC Energy Group's fourth-quarter earnings call focused largely on the company's natural gas initiatives.
Upper Michigan Source of NatGas Growth for WEC Energy Group - Natural Gas Intelligence
Research Analysts Issue Forecasts for WEC Energy Group, Inc.'s FY2021 Earnings ... - The Cerbat Gem
WEC Energy Group: Well Positioned For The Future - Slides
Seeking Alpha - Jul 13, 2016
In addition to the assumptions and other factors referred to in connection with the forward-looking information, factors that could cause WEC Energy Group's actual results to differ materially from those contemplated in any forward- looking information ...
Wisconsin Energy clears final hurdle for $9.1 billion acquisition of Integrys ...
Milwaukee Journal Sentinel - Jun 24, 2015
"We have very high expectations for WEC," said Sheahan, referring to WEC Energy Group, the new name for Wisconsin Energy once the deal is completed.
ICC blesses acquisition of Peoples Gas parent - Crain's Chicago Business
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for TEG to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate TEG's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$69.66 Current Price

$-0.00 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$0.00 Stability Price (EPV)

Overvalued by 100.00%


Discount Rate: 15.0%


Very Poor Cash Return on Invested Capital over the past 5 years

TEG has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

TEG has lost $41.49 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20122013201420152016
Free Cash Flow -25.30M -114.20M -263.60M -2.55M -1.34M
divided by
Invested Capital 8.49B 9.36B 9.83B 1.30M 21.74M
Cash ROIC -0.30% -1.22% -2.68% -197.09% -6.16%

Poor Return on Equity over the past 5 years

TEG has shown an inability to deliver strong results for shareholders. This could be due to poor management, TEG operating in a highly competitive industry, or having a weak business in general.

TEG has only generated $5.72 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20122013201420152016
Net Income 284.30M 354.80M 279.90M - -
divided by
Stockholders' Equity 3.08B 3.26B 3.30B - -
Return on Equity 9.24% 10.88% 8.48% - -

Poor Business Performance over the past 6 years

TEG's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

TEG has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Free Cash Flow 410.50M -25.30M -114.20M -263.60M -2.55M -1.34M

Weak Balance Sheet

TEG's financial position is not ideal. The key is to check whether TEG is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Cash 28.10M 27.40M 262.40M 18.00M 238,409.00 3.84M
Current Assets 1.80B 1.66B 1.97B 1.41B 436,147.00 5.59M
Total Assets 9.98B 10.33B 11.24B 11.28B 2.40M 32.22M
Current Liabilities 1.65B 1.81B 1.62B 1.44B 3.58M 3.84M
Total Liabilities 6.97B 7.25B 7.98B 7.98B 3.93M 29.41M
Stockholder' Equity 3.01B 3.08B 3.26B 3.30B - -
Current Ratio 1.10 0.91 1.22 0.98 0.12 1.46
TL-to-TA 0.70 0.70 0.71 0.71 1.64 0.91

Low or No Reinvestment of Profits over the past 6 years

TEG has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to TEG operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Retained Earnings 363.60M 431.50M 567.10M 626.00M - -
Retained Earnings Growth - 18.67% 31.43% 10.39% -100.00% -

Highly Competitive Industry over the past 6 years

It's likely that TEG is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely TEG invests heavily in R&D and Sales, General & Administrative expenses.

Only $4.12 of every $100 of Revenue have been profit, on average over the past 6 years.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Net Income 230.50M 284.30M 354.80M 279.90M - -
divided by
Revenue 4.71B 4.21B 5.63B 4.14B 730,597.00 -
Net Profit Margin 4.90% 6.75% 6.30% 6.75% - -

Varying Pricing Power over the past 6 years

TEG has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$47.72 of every $100 worth of sales have been Gross Profit, on average over the past 6 years.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Gross Profit 4.71B 1.85B 2.13B 2.01B 410,608.00 -
divided by
Revenue 4.71B 4.21B 5.63B 4.14B 730,597.00 -
Gross Margin 100.00% 43.82% 37.75% 48.53% 56.20% -

High Capital Intensity over the past 6 years

TEG spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

210.45% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Capital Expenditure 311.40M 594.30M 669.20M 865.00M - 29,997.00
divided by
Net Income 230.50M 284.30M 354.80M 279.90M - -
Capital Expenditure Ratio 135.10% 209.04% 188.61% 309.04% - -

Inconsistent Dividend History over the past 6 years

TEG has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Dividend Paid 209.50M 215.00M 205.70M 219.40M - -
divided by
Shares Outstanding 79.10M 79.30M 80.10M 80.70M 2.79B 5.89T
Dividend Paid Per Share 2.65 2.71 2.57 2.72 - -
Price at Year End 53.50 51.61 54.38 79.18 69.66 69.66
Dividend Yield 4.95% 5.25% 4.72% 3.43% - -

No History of Stock Buybacks over the past 6 years

We're neutral on this. It's not necessarily good or bad that TEG hasn't initiated a stock buyback.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Shares Outstanding 79.10M 79.30M 80.10M 80.70M 2.79B 5.89T
Stock Bought Back - -0.25% -1.00% -0.74% -97.11% -99.95%
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